Multiple factors are pointing towards a greater likelihood of new North Sea entrant NEO to become more serious about exploration on the UK Continental Shelf.
In a week when UK Energy Secretary Greg Hands announced that the door to continued exploration and issuing of licences should remain open, former EVP Exploration at Statoil/Equinor Tim Dodson joins the board of active newcomer NEO Energy. It is not the first time someone from Equinor joins the ranks of Hitec-Vision-backed NEO, but a person with a background in exploration may be an indication that there is a renewed interest in more frontier drilling.
With oil prices north of $100 a barrel, even for private-equity backed companies that may not necessarily warm up to drilling high-risk/high reward wells, there may be more of an incentive to try and firm up volumes that have been ignored for many years.
Tim Dodson’s arrival at NEO brings other expertise as well. From his time at Equinor, he must have had some good exposure to the Rosebank project West of Shetland. Although NEO is not a partner in the development, there could be a partner (Siccar Point or Suncor) that is keen to sell. Dodson’s expertise may help in getting a deal done. At the end of the day, Equinor seems serious about the field development as it signed a contract to lease Petrojarl Knarr FPSO.
Another thing that Tim Dodson may help with is explaining to NEO what Equinor is up to with regards to Mariner. As we reported on recently, this flagship UKCS heavy oil development – operated by Equinor – recently experienced a serious set-back when a significant reserves downgrade was announced. It happened a very short while after NEO acquired JX Nippon’s 20% non-operated stake in the field.
HENK KOMBRINK
